Bitcoin traded slightly lower Thursday and with the digital currency’s recent rally, showing signs of stalling around the $9,000 area, some technical analysts are concerned the king of cryptocurrencies could be in for a near-term pullback.
After rallying from just over $6,900 earlier this month to over $9,200 earlier this week, a pullback would not be surprising and it would be, arguably, healthy. Additionally, some bitcoin price forecasts imply massive upside from current levels. Some bitcoin bulls believe the digital currency can rise to $25,000 this year. Others see $200,000 and higher being reached in just a few years.
Now this: John Pfeffer, a partner at UK-based Pfeffer Capital, said at the Sohn investment conference in New York that bitcoin could eventually be worth $700,000.
“Bitcoin is the first viable candidate to replace gold the world has ever seen,” Mr Pfeffer said, reports The Independent. “So if bitcoin becomes the dominant non-sovereign store of value, it could be the new gold, or new reserve currency.”
Some market observers doubt bitcoin’s ability to be a credible threat to gold, citing, among issues, lack of adoption of digital currencies as stores of value, gold’s centuries-long reputation as a currency and a store of value and gold being significantly less volatile than digital assets.
“Mr Pfeffer said that if bitcoin displaced 25 per cent of foreign reserves, the total worth of the bitcoin network would be somewhere in the region of $6.4 trillion,” according to The Independent.
Pfeffer is the first hedge fund manager to highlight cryptocurrencies at the famed Sohn conference. However, he also mentioned that the asset class carries significant risks and that outside of bitcoin, most other crypotcurrencies could potentially punish investors.
Over the near-term, market participants appear bullish on bitcoin, the largest digital currency. A recent survey of an albeit small group suggests 82% of those polled believe bitcoin has put in a near-term bottom.
U.S. Takes Crypto Crime Seriously with Anti-Money Laundering Reforms
The United States passed into law its Anti-Money Laundering Act of 2020, which takes effect on January 1, 2021. This brings digital currency exchange companies and other digital-asset-related businesses under the scope of regulations of the Bank Secrecy Act (BSA), which requires financial institutions “to actively detect, monitor and report potential money laundering activity.”
“I’m pleased that our anti-money laundering legislation was included as a part of this year’s [National Defense Authorization Act]. This bipartisan legislation protects Americans by depriving criminals and terrorists of the tools they use to finance illicit activity. It is the first serious overhaul of our anti-money laundering system in decades, and it makes sense to include it in the biggest, most important national defense legislation Congress passes each year,” South Dakota Sen. Mike Rounds said in a press release.
The massive anti-money laundering reforms are targeting businesses dealing with digital currencies and assets by clearly specifying the definition of a “financial institution” to “‘a business engaged in the exchange of currency, funds, or value that substitutes for currency or funds” and “a licensed sender of money or any other person who engages as a business in the transmission of funds or value that substitutes for currency.”
The reforms further define a “money transmitting business” to include those who deal with “currency, funds, or value that substitutes for currency.” Now, there are no longer loopholes that digital asset companies can use when dealing with the Financial Crimes Enforcement Network (FinCEN), the agency that enforces the BSA.
Stricter Penalties Enforced
Aside from updating definitions to ensure that digital currency exchange firms and others dealing in digital assets are clearly within the scope of the AML Act of 2020 and the BSA, stricter penalties are now being enforced for crypto criminals.
Now, those who have been found guilty of violating the AML Act of 2020 and/or BSA are faced with fines amounting to profits earned while committing the violation and possible jail time. Those guilty of an “egregious” breach are also going to be banned from taking a board member position of any financial institution in the country for 10 years. Furthermore, employees of financial institutions who commit these crimes will be obligated to return to their employer all bonuses received during the time the act was committed.
FinCEN is being given additional resources, like increasing its manpower, to ensure the enforcement of these reforms. This will further safeguard investors against crypto crimes and nail down digital currency exchange firms and other digital-asset-related businesses that do not comply with BSA regulations.
Bitcoin (BTC) Crosses 55k And Is Heading Towards 60k Fast!
Less than two months into 2021, the price of bitcoin has risen 95.4%.
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Cardano founder, Charles Hoskinson speaks on the future of Bitcoin and taking profits
Charles Hoskinson has always been a huge advocate for decentralized finance and building a network that could provide solutions to the problems with our current financial and banking systems. In this recent AMA Charles speaks out on his view about the issues that Bitcoin faces as well as reminding everyone that cryptocurrency isn’t all about taking profits.